Patanjali impact: Dabur Honey's sales slow down

Dabur said it would invest Rs. 500 crore on expansion of manufacturing facilities

April 29, 2016 12:15 IST

Dabur has existing manufacturing facilities in Nigeria and Egypt. Pictured: Dabur company logo.en.wikipedia.org

Delhi-based fast moving consumers and goods (FMCG) company Dabur said on Thursday the sales of its various health products, including honey, showed growth of in the single digits in the March quarter (Q4FY16), especially because Patanjali's honey entered the market at discounted prices.

Patanjali is selling a 500-gram honey bottle for Rs. 135 whereas Dabur's price for its 500-gram bottle is Rs. 199 on bigbasket.com, the Mint reported.

Dabur reportedly admitted that the sales of its honey were affected by Patanjali's aggressive honey launch on the online portal. Patanjali's co-founder, yoga guru Ramdev, said on Tuesday he was planning to beat MNCs, including Nestle, Colgate and Procter & Gamble, this fiscal. Patanjali announced that it recorded sales worth Rs. 5,000 crore in the financial year 2015-16, and is targeting Rs. 10,000 crore in sales this fiscal.

Dabur management said although it would not compete with Patanjali on price factor, the company is planning launch squeezy honey and various other varieties in the market next month.

Dabur is even hopeful that Patanjali's entry into markets may boost the overall sales of Ayurvedic products.

Dabur Chief Executive Officer Sunil Duggal was quoted by the Mint as saying Patanjali may actually help in case of products such as chyawanprash, which hasn't seen good sales in recent years.

Duggal said although chyawanprash sells well for the most part of winter, Ramdev's evangelism or disruptive influence could also boost the sales of this product.

He added that Ramdev's efforts could benefit the Ayurvedic products market in India as a whole. Dabur, he said, reported good sales of herbal toothpastes after Patanjali entered the market.

Patanjali's success story seems to have rubbed on Dabur, as the FMCG company is now planning to invest Rs. 500 crore this year on its manufacturing facilities. As part of its expansion plans, Dabur would invest Rs. 250 crore to set up a new plant in Assam for manufacturing health and personal care precuts, according to the Times of India.

Dabur reported a consolidated net profit of Rs. 331.9 crore for the fourth quarter, up from Rs. 284.9 crore in the year-ago period. The net sales of the company increased 10.9 percent to Rs. 2,157.3 crore, from Rs. 1,994.8 crore in the same period a year ago.